Customs and Excise Director-General Louise Ho Puixian also said on Saturday that the country is stepping up international cooperation to crack down on money launderers who take advantage of the anonymity of virtual currency transactions.
Regular money exchangers in the city are currently under the jurisdiction of the ministry, but over-the-counter (OTC) cryptocurrency versions are not currently subject to any licensing or regulatory regime.
Hong Kong JPEX virtual currency scandal exposes regulatory “loophole”: Victim
Hong Kong JPEX virtual currency scandal exposes regulatory “loophole”: Victim
Managers of these stores were among the 28 people arrested by the police on suspicion of fraud centered on the virtual currency exchange JPEX. Some OTCs promoted JPEX investment products, which the Securities and Futures Commission called “too good to be true.”
Mr Ho said on the TV show that the authorities and “relevant regulators” were considering governance options for the store in the aftermath of the scandal.
“There are two sides to it.” [regulating] These OTC exchange shops. “One aspect includes combating money laundering and terrorist financing, and the other includes investor protection,” she said. “I think if we need to improve this regulatory regime in the future, we need to consider both aspects.”
However, Ho declined to say whether his department was involved in the review, saying only that “there is always room to improve enforcement and oversight systems.”
He said that customs authorities are seeing an increase in money laundering cases involving virtual currencies, especially in large-scale schemes.
“Financial technology is becoming increasingly mature and we have observed an increase in virtual asset trading activity. Transactions are more hidden and are not restricted by time or location, making it easier for criminals to launder money. It can be used for.”
Ho said her agency is increasing cross-border cooperation as these activities involving virtual assets are international in nature.
“Cryptocurrency investors need education”: Hong Kong YouTuber following JPEX allegations
“Cryptocurrency investors need education”: Hong Kong YouTuber following JPEX allegations
Later this month, Hong Kong Customs plans to sign a memorandum of cooperation with South Korea’s Customs to strengthen information sharing and enforcement cooperation as part of its efforts to crack down on money laundering.
He said the ministry will also promote international cooperation in combating crime, as he will assume the post of vice-chairman of the Asia-Pacific region of the World Customs Organization for a two-year term starting July 2024.
Hong Kong JPEX virtual currency scandal: Suspect arrested on arrival at airport
Hong Kong JPEX virtual currency scandal: Suspect arrested on arrival at airport
Hong Kong police have received more than 2,500 complaints regarding the JPEX scandal, which involved more than HK$1.5 billion (US$191.7 million). Investigation is ongoing.
Blockchain analysis firm Bitrace reported last month that some Tether tokens processed in online wallets associated with JPEX were “tainted” as they were linked to money laundering and online gambling.
